Barack Obama, Education / Schools, Money, Politics, Student Loans

Debt Ceiling Deal Includes Last-Second Screwing Of Graduate Students

The worst thing about being betrayed is the loss of innocence and optimism that forever changes the victim of the betrayal. The reality is so stark you can literally see it on people’s faces as they realize the extent to which an ally has turned on them. Robert the Bruce saw it on William Wallace’s face in Braveheart. My wife saw it on my face when Obama agreed to the debt ceiling deal. And you are going to see it on the faces of the young and educated when they realize that, once again, the president has sold them down the river for the cause of electoral expediency, even as Obama’s numbers drop so low that his heat can only be measured in Kelvin degrees.

In the total debt ceiling cave-in that will mark Barack Obama as the most successful Republican president since Ronald Reagan, there was one cut that really illustrates how little the president cares for his young, college-educated constituents. To save about $26.3 billion dollars, the debt ceiling deal eliminates the graduate student loan subsidy. That means that law students (and other grad students) will continue accruing interest on their non-dischargeable educational loans throughout their graduate studies.

I can see why they call education the “silver bullet,” because education certainly seems like a surefire way to kill one’s economic future….

The graduate loan cut wasn’t the most ridiculous so-called compromise Obama made while John Boehner was pumping him like Richie Aprile did to Janice Soprano. But it is illustrative of the extent to which Obama has abandoned the young people who helped elect him so that he can court… well, I don’t know exactly what universe he lives in where he thinks a black Republican running as a pro-war Democrat wins a general election. The Hill explains:

The largest change related to student loans that is included in Speaker Boehner, Senator Reid, and the revised Budget Control Act, is to end subsidized interest loans for graduate students after July 2012, resulting in a savings of approximately $18.1 billion over 10 years. Moreover, the revised Budget Control Act, largely resembles the Speaker’s original proposal.

The Budget Control Act of 2011 would end giving interest subsidized loans to graduate or professional students excluding those students enrolled in teaching credential or certification programs required by the state, while unsubsidized loans are still available. The Act would also give Pell Grants $13 billion in mandatory funds over two years to make up for the funding gap, but would give $20 billion total to the Pell Grant program. The elimination of subsidized loans for graduate students will save approximately $18.1 billion over 10 years for all three plans. Like Boehner’s plan, the current deal will also end the Department of Education’s loan repayment incentives saving about $3.6 billion over 10 years. Based on information comparing the three acts, the deal would reduce total direct spending by about $4.6 billion over 10 years, or about the same amount that Speaker Boehner’s act would save.

You know what’s ironic? The deal included full funding of Pell grants. I’m telling you, when Obama, or the ghost of Nancy Pelosi, or Harry “I’m the least powerful Majority Leader since Agamemnon” Reid are out defending this legislative capitulation, they’re going to bring up the Pell grants as something that they “won.”

Back here, on The Planet of the Tea Party, it’s likely that the easy availability of federal funds is one of the reasons students are in such trouble in the first place. Nearly unlimited federal loans for education provide no incentive for educators to keep costs under control. If you accept the false choice that requires cutting anything regarding college and graduate student education, wouldn’t you cut the unfettered grants and keep the subsidy, so that people could have a better shot at paying back what money they did borrow?

Sorry, no. ‘Cause that would be an intelligent thing to do. It would be a progressive thing to do. It would make it a little bit harder for already well-off university administrators and faculty to make more profits, so that it would be a little bit easier for non-wealthy students to get out of an economic hole. That’s not what we do in America. In America, we make sure that those with the most money can keep as much of it as possible and, well, who cares about anybody else?

So yeah, kids. BORROW MORE MONEY. The government is here to help you do that. Evidently, the best way to overcome the bursting of the housing market bubble is to super-size the student debt bubble. Making bubbles always works! There’s a strategy that cannot possibly fail, again.

The delinquency of the debt ceiling and student debt [The Hill]
Debt Deal Would End Subsidized Loans To Grad Students, Produce Savings Equal To Only Three Months In Afghanistan [Think Progress]

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